Buy Now Pay Later is a payment method wherein a customer can make a purchase and pay it off at a future date often without any interest. The Indian BNPL market currently stands at around $3.5-5 billion and is set to reach around $40 billion by the year 2025. Consumers primarily use this option for online shopping, food delivery, bill payments, online travel, and EdTech.
With over 1 billion of a population, India has a huge consumer base and a largely untapped market. BNPL is an ongoing payment method which is popularly used in countries such as Sweden, Australia, UK and Germany. BNPL offers new credit consumers i.e. the new age millennials and gen-z a chance to avail of a short term credit payment without a credit history. More people are choosing to opt for credit, as access to credit is seeing increasing demand. Surveys revealed that 33% of men and 22% of women planned on using BNPL services. 43% of working women are now choosing BNPL in India.
How does BNPL work?
A customer makes a purchase at a participating retailer and opts for buy now, pay later at checkout. Within a few seconds, the request for BNPL gets approved. Once approved, the customer makes a small down payment, which could be as much as 25% of the overall purchase amount. The customer then pays off the remaining amount due in a series of interest-free instalments within the pre-decided time period. Payments can be made via a check or bank transfer, they can also be deducted from a debit card, bank account, or credit card automatically.
In order to bring awareness to the BNPL ecosystem, mBnk with FFIFS is hosting webinar sessions. Through these sessions, we intend on bringing problems to light such as a low base BNPL in its rapidly changing forms can really become a force in itself to bring forth the fundamental issue of Access to Credit.
The domino effect created by the momentum of a small initiative could lead to a major change. Such instances were seen by talks on financial inclusion which amounted to the start of mammoth projects such as Aadhar, UPI, Jan Dhan, Mudra etc. The part played was not only by the Government but also by the businesses and the advocacies. Together, it became a community movement which proved to be symbiotic for both the giver and the receiver.
BNPL is a worldwide phenomenon which has not yet gained popularity in India. However, if we choose to join this phenomenon, it will help make our community grow stronger, self-reliant and well-endowed. If you want to learn about the BNPL ecosystem and how it is set to capture the Indian market from industry experts, register yourself now for the special webinar sessions hosted by mBnk along with FFIFS today!